This month is uniquely focused on redressing the economy and on professional activities: no public holidays are scheduled during this month.

Next one coming up is October 23 rd, commemorating the passing of King Chulalongkorn.

The main law governing labor relations in Thailand, underwent significant amendments in May 2008. Now well into 2009 we start seeing the practical effects of some of these changes as well as the strict enforcement by the labor inspectors and courts.

We will highlight 4 topical changes in today's contribution:

Temporary cessation of work

Although at the time of publication in May 2008 nobody expected it to be so rapidly being tried and tested, the changes concerning temporary business cessation for reasons other than force majeure were strictly implemented and affected tens of companies in the past months:

• the employer now has to pay 75% of a normal working day's wages (up from 50 %) per day not worked

• the stricter definition of what constitutes a valid reason for cessation gave some hiccups when so many factories had to stop working during the first and second quarter of 2009 – what used to be a pure formality, now requires professional guidance and support of an experienced HR person or a lawyer

• companies now need to give 3 day's notice prior to the cessation being becoming effective (up from 0)

Overtime regulations

The 2008 labor act allows parties to agree that employees who work less than their regular scheduled hours on a particular day may make up for the missing hours by working extra time on other normal working days – in fact allowing a substantial amount of flexibility as long as parties agree. This measure was very positively welcomed by the companies with hectic order volumes.

However the total number of working hours must not exceed 9 hours per day and 48 hours per week. The employer shall pay remuneration at 1.5 times the hourly wage rate for the hours worked in excess of 8 hours!!

Severance Pay

When a company relocates its place of business, employees may choose to end the employment contract if the relocation has an important impact on their or their family’s way of life. If they do so, they are entitled to a special severance pay. This special rate was increased from 50 % of normal severance to a full 100%.

As a reminder, the severance pay varies between 30 days and 300 days in Thailand depending on length of service.

Probation

The LPA 2008 makes it clear that probationary employees are entitled to the same notice of termination to which other employees are entitled ( commonly 1 month after the current pay period ends

If you would like to know more about Gemini in Thailand please contact your Gemini consultant or see our website www.gemini.com.hk

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